Central Bank of Kenya’s (CBK) September twenty-one-year infrastructure bond issuance attracted a subscription worth Ksh 151 billion with Ksh 106 billion being accepted.
The oversubscription, 201.67%, was largely attributed to the high market liquidity as had been projected by market analysts.
Results of Twenty One-Year Treasury Bond Issue No. IFB1/2021/021 Dated 13 September 2021 pic.twitter.com/riJaVY0dH6
— Central Bank of Kenya (@CBKKenya) September 8, 2021
“We expect the paper to be well bid. However, the absorption might be dependent on how market bids and the real appetite for the funds by the sovereign,” Stephanie Kimani, NCBA Market Research had said.
However, private sector credit remains weak in the single digits for more than 3-years, NCBA notes adding that “the sharp decline in interest rates in the period notwithstanding”.
“That said, the upward pressure on funding costs for banks as benchmark interest rates rise could see an increase in lending rates, which may potentially weaken credit access for some sections of the economy,” NCBA September Report alludes.
Jimnah Mbaru, an Investment Banker further adds that “This shows that there is a lot of money not being invested. This is a sad situation. It reflects delayed investments. Is political uncertainty to blame?
Central Bank of Kenya wanted to raise Kshs 75 billion. The market offered Kshs 151 billion. This shows that there is a lot of money not being invested. This is a sad situation. It reflects delayed investments. Is political uncertainty to blame?
— Jimnah Mbaru (@JimnahMbaru) September 8, 2021
The infrastructure bond will be listed on the Nairobi Securities Exchange with its secondary trading in multiples of KSh 50,000.00 to commence on Tuesday, 14th September 2021.